100 likes | 116 Views
Blackboard. Blackboard. Moodle. Moodle. Problem 4. Suppose $1,000 is deposited into an account with an annual yield of 8% compounded quarterly. Find the amount in the account at the end of five years, ten years, twenty years, and thirty years?.
E N D
Problem 4 Suppose $1,000 is deposited into an account with an annual yield of 8% compounded quarterly. Find the amount in the account at the end of five years, ten years, twenty years, and thirty years? We have P = $1000, while the interest per quarter is i = (0.08)(1/4) = 0.02. Thus F = $1000(1+0.02)n. Now we can obtain YearsPeriodsFuture Value 5 20 $1000(1 + 0.02)20 = $1,485.95 10 40 $1000(1 + 0.02)40 = $2.208.04 20 80 $1000(1 + 0.02)80 = $4,875.44 30 120 $1000(1 + 0.02)120 = $10,765.16
Helpful websites • http://www.mathsisfun.com/data/standard-normal-distribution-table.html • https://www.khanacademy.org/economics-finance-domain/core-finance/interest-tutorial/compound-interest-tutorial/v/introduction-to-compound-interest